Types Of Insurance For Small Businesses by Art Gib

Starting a new business is a major undertaking that may not always be fruitful at the beginning. But with hard work and careful planning, small businesses can offer high profits. In fact, as the economy begins to emerge out of the recession, analysts conjecture that the number of small businesses will grow and more of them will be successful than ever before.

However, with the promise of rewards also comes the danger of risk. When a small business is starting out, it typically does not have the funds to combat major unexpected expenses, which is why so many small businesses fail within the first five years. One way to prepare and protect you and your business from these unforeseen costs is to purchase insurance. And there are several different types of insurance that are designed to help protect you as you work to achieve success with your small business.

General Liability

General liability insurance provides coverage to pay for legal costs resulting from accidents, injuries, and claims of negligence. This insurance is essential if your business requires your employees to perform potentially dangerous activities. However, liability insurance can cover more than just medical expenses; it can also cover property damage and expenses resulting from cases of libel and slander, including the cost of defending lawsuits and settling bonds.

Workers' Compensation

A specific type of liability insurance is workers' compensation, which specifically covers costs of bodily injury of employees. If your employees work in high-risk or even potentially risky situations or environments, this is an essential type of insurance to have because the medical expenses of just one employee could potentially drain all of your profits. In some states, you may be required to purchase state-mandated workers' compensation insurance, while in others you may be able to join a self-insuring group that will provide the necessary coverage.

Product Liability

Product liability insurance is crucial to own if you are starting a retail business that will manufacture and distribute products. If your product could be potentially harmful to buyers in any way, product liability insurance protects against costs resulting from a defective product or a product that causes physical harm to another person. When deciding if you need product liability insurance, you should evaluate your product to see what the risks factors are.

Errors and Omissions

Errors and omissions insurance is offered to those businesses that provide services to customers. In case of financial loss to due malpractice, errors, or negligence, this type of insurance will provide coverage to help protect your assets. Not only is this a helpful type of insurance to have, but in some states it is required for certain professions. You should look into your state government's laws to see if you are required to have this type of protection.

Life and Disability

Life and disability insurance is not the most popular type of insurance among small businesses, because it is not always needed. This type of insurance basically covers any financial loss incurred resulting from the death or disability of a key player or partner in the business. This insurance is the most helpful if your business offers a product or service that centers around a single person who, because of identity, is either irreplaceable or whose death or disability would require major reorganization or reconstruction of the company.

Commercial Property

Property insurance is important to have if your business utilizes any kind of building or other property, and it protects against damages and loss that cannot be controlled, including damage incurred from natural disasters, such as hurricanes, floods, wind, hail storms, fires, and earthquakes, Commercial property insurance can also protect against damage caused by societal disturbances, civil disobedience, and vandalism. The property covered by this insurance varies, but it can include lost income, buildings, computers, valuable papers, money, and more.

Unemployment Insurance

Not only is unemployment insurance wise to purchase, all businesses in every state of the U.S. is required to have this insurance if the business has employees. Unemployment insurance covers benefits owed to an employee if he or she is terminated under certain circumstances. In each state, the amounts, limits, and how the benefits are paid differ slightly, so it's important to research the particulars of unemployment insurance in your own state if you want to learn more.

Restaurant insurance

And if you own a restaurant, there are even more things to consider when purchasing insurance. Restaurants are complex infrastructures that come with many risks. A fast-paced environment in conjunction with a restaurant's potentially dangerous equipment leaves room open for possible liabilities. Restaurant insurance can help protect against those risks and liabilities and can offer a variety of different coverage options. For instance, restaurant insurance can include property insurance that protects the building against any physical loss or damage, and in some cases it will protect the property inside the buildings as well. Other types of coverage found in restaurant insurance policies include loss of use of business income, which is valuable to have if your restaurant ever has to close down to repair damages, and liability coverage.

Of course, these are only a few of the types of insurance that small businesses may need to protect them from financial loss, but they are the most popular and the most comprehensive. If you feel you may need more coverage for your business, you should consult with a financial broker. By taking the necessary precautions and purchasing insurance, you can help protect you and your business from unexpected costs and expenses that could be detrimental to the growth of the company. And more important, with the right insurance coverage, you can help move your business forward toward success.

All Franchise Insurance (http://www.allfranchiseinsurance.com/) is dedicated to providing franchise operations in all different industries the low-cost, quality small business restaurant insurance they need to stay protected. Art Gib is a freelance writer.

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